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Romania’s Banking Regulations Compliance: A Comprehensive Overview

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The National Bank of Romania (NBR) is responsible for banking regulation, supervision, and resolution in Romania. The NBR sets out the legal framework governing the activities of banks in the country.

Licensing Requirements

To operate as a bank in Romania, a license from the NBR is required. This applies to various financial activities such as accepting deposits, issuing securities, and providing credit facilities. Banks operating in Romania must hold a valid license issued by the NBR, which ensures compliance with the country’s banking regulations.

Fintech Regulations

Romania has implemented a “sandbox” regime that enables fintech companies to operate under a lighter regulatory framework. This allows these entities to test innovative products and services while complying with certain conditions.

Cryptocurrency Regulations

Romania has not imposed a moratorium on the issuance or custody of cryptocurrencies. However, banks operating in the country are required to comply with anti-money laundering (AML) and know-your-customer (KYC) regulations when dealing with cryptocurrencies.

Capital Requirements

Cryptocurrencies held by licensed entities in Romania are treated as deposits and are covered by deposit insurance up to a certain amount. The NBR has implemented specific capital requirements for banks holding cryptocurrencies, which include risk-weighted assets and other regulatory measures.

Licensing Process

To obtain a bank license in Romania, applicants must submit a comprehensive application that includes detailed information about the proposed bank’s activities, structure, and management. The average timing for the licensing process is around six months, although this may vary depending on the complexity of the application and any additional requirements from the NBR.

Cross-Border Banking

Romania allows cross-border banking activity, subject to certain requirements and conditions set out by the NBR. Foreign banks operating in Romania must hold a valid license issued by the NBR and comply with local regulations.

Bank Structure and Governance

Banks in Romania can operate under various legal forms, including joint-stock companies, limited liability companies, and cooperatives. The NBR requires banks to have an adequate organizational structure, including corporate governance mechanisms that ensure transparency and accountability.

Basel III Framework

Romania has implemented the Basel III framework for regulatory capital, which sets out minimum requirements for bank capital and liquidity. Banks in Romania are also subject to the leverage ratio requirement, which ensures that they maintain a certain level of capital relative to their assets.

Financial Reporting

Banks operating in Romania must publish their financial statements on a regular basis, including annual reports and quarterly reports. The NBR conducts consolidated supervision of banks, which involves monitoring their financial condition, risk management, and compliance with regulations.

Shareholding Acquisitions

The acquisition of shareholdings in or control of Romanian banks is subject to approval by the NBR. Eligible owners of banks must meet certain requirements, such as having a good reputation and being financially sound.

Foreign Shareholdings

Romania has specific restrictions on foreign shareholdings in banks, which aim to ensure that they do not compromise the country’s financial stability. The NBR also imposes conditions on the acquisition of significant participations in Romanian banks.

Systemically Important Banks (D-SIBs)

Domestically systemically important banks (D-SIBs) are subject to a special regime that requires them to maintain higher capital and liquidity buffers. The NBR can impose sanctions on banks that violate banking regulations, including fines, suspension of operations, or revocation of their licenses.

Resolution Regime

Romania’s resolution regime for banks aims to ensure the continuity of essential financial services during times of crisis. The regime includes measures such as deposit insurance, asset protection, and recapitalization.

Threats to Financial Sector

The biggest threat to the success of Romania’s financial sector is the ongoing impact of the COVID-19 pandemic, which has led to economic uncertainty and volatility. However, the NBR has taken proactive measures to mitigate these risks and ensure the stability of the banking system.